O&R Files For Electric And Gas Rate Review With NYSPC
Plan: Bury more key electric lines, further automate system, focus on clean energy
To provide for the continued safe, reliable and secure operation of its electric and natural gas delivery systems, Orange and Rockland Utilities (O&R) today requested a regulatory review of its electric and natural gas delivery rates by the New York State Public Service Commission (NYSPSC).
If approved by the NYSPSC, the new rates for the delivery of both electric and natural gas would become effective January 1, 2022.
Today’s filing begins an intensive public review process with the New York State Department of Public Service (NYSDPS) and several interested parties, including energy industry representatives and consumer and environmental advocacy groups. Customer input through public hearings is also part of the process.
O&R recognizes that in the clean energy future, customers will increase their dependence on electricity as an essential service to provide for heating and transportation as well as for power and cooling. This will drive an increase in the importance of even greater reliability and resiliency --- both critical goals of today’s request for regulatory rate review.
O&R President and CEO Robert Sanchez said, “Reliable energy service has never been more important to our customers and their families than it is today. And, that reliability will only become more important in the future.”
He added, “Through its storm hardening programs, system automation initiatives and gas main replacement plans, O&R is committed to improving its electric and natural gas system resiliency to provide a stronger, brighter energy future.Today’s rate review request will help strengthen that commitment.”
In addition, over the past year, the COVID-19 pandemic has made our customers more dependent than ever on the energy we provide. Never before have so many of our customers been home around the clock, relying on the electricity and natural gas we deliver to comfort them in illness, power their work, support their studies, preserve their food, cook their meals, and keep them warm, safe and secure.
O&R’s construction projects serve to increase employment in the local economy, and energy system expansion to accommodate anticipated load growth supports investments in homes and businesses in the O&R service area. These investments add jobs to the local economy in many areas and spur general economic development.
O&R has developed plans and designed projects that will build a stronger, more resilient energy delivery system that will be powered by clean, abundant, renewable sources. Here are those plans:
Electric System Resiliency Improvements
In today’s electric rate review filing, O&R proposes a series of powerful initiatives designed to significantly increase electric service reliability by undergrounding more key overhead electric lines to protect them from storm damage, installing more computer-managed repair technology to promote electric circuit dependability and modernizing O&R’s system to connect it to more renewable clean energy sources.
Supporting these initiatives are the following proposed investments:
Storm Hardening – O&R proposes to spend $33 million for storm hardening, including 14 strategically located underground projects ($28.2 million for 51,000 feet) and the installation of seven overhead reinforced spacer cable projects ($5 million for over 30,000 feet) at key locations to improve system resiliency.
The strategic underground projects will take place across the service area, including Congers, Middletown, Spring Valley, Wurtsboro, Tuxedo, Waywayanda and West Nyack among other locations.
Similarly, overhead reinforced spacer cable projects will be completed across the service area in locations to include Central Valley, Glen Spey, New City, Suffern, Warwick, and others.
Grid Modernization – O&R’s targeting approximately $16 million to expand the automation of the electric distribution system to prevent and reduce outages, their frequency, their duration and their scope. This includes the implementation of a computer-based decision support system to monitor and control the electric system as more technology is installed to further automate the system.
Expanded Tree Trimming and Hazardous Tree Removal Program – Approximately $8.4 million is earmarked to extend the expanded line tree clearance program to more distribution lines and to expand four-fold the ranks of full-time crews assigned to the hazardous tree removal program.
Electric Transmission Improvements – O&R also is proposing investments in the electric transmission system that are necessary to increase reliability and lower system risk. Some of these projects also create additional local hosting capacity for renewable energy projects, supporting New York State’s Climate Leadership and Community Protection Act’s (CLCPA) nation-leading carbon reduction goals.
Among those projects are:
- Building two new electric substations --- one in Stony Point with an investment of $51 million and one in New City with an investment of $28 million --- to improve the capacity and reliability of the O&R transmission system.
- Beginning work on undergrounding a major transmission line that runs across southeastern Rockland County area from Spring Valley to West Nyack to address load growth and bolster system reliability by mitigating contingency concerns and operating risks. O&R is investing approximately $8 million in this project during 2022-2024.
- Initiating a five-year joint project with the U.S. Military Academy involving multiple substations and an upgrade to the adjacent transmission system that addresses significant load growth and development on West Point’s campus over the past 10 years. This plan also reduces the risk of extended outages for West Point and customers in the villages of Highland Falls, Fort Montgomery, and the surrounding area, involving an estimated $26 million in investment by O&R during 2022-2024.
Many of the reliability investments in electric transmission, substation, and distribution, as well as gas infrastructure investments, will support a number of local contractor jobs over the course of construction.
Clean Energy – Today’s filing also contains investments to support the clean energy goals of the New York State’s CLCPA. Those investments support multi-value transmission and distribution projects that will enable utility-scale renewable generation and storage interconnections, unbottle capacity-limited facilities, and assist in the upgrade of aging infrastructure.
These include three such multi-value projects that will be completed during the 2022 - 2024 period with total investment of $34.6 million. O&R also will initiate three additional multi-value projects to be completed after 2024, with work totaling $20.1 million in investment in the 2022 – 2024 period.
These six projects will be located across the service area and will include: upgrading the Shoemaker substation in Middletown, upgrading key transmission lines running from Orange to Sullivan County and installing batteries in Woodbury to address near-term load growth.
Clean Energy Customer Enablement – In addition to the actions to support CLCPA discussed above, this rate filing describes ongoing projects that support a clean energy future. These projects include:
- Monsey Non-Wires Alternative (NWA): Rather than adding additional infrastructure to address the significant development and increased need for more electric capacity in the Monsey substation service area, the company is working with customers to reduce their need for grid power and is deploying innovative energy solutions through this NWA project. The company is requesting $22.5M for the project.
- Innovative Storage Business Models Demonstration project: This project explores new ways for home battery systems, coupled with home solar, to provide additional resiliency for customers as well as provide value to the electric grid. This network of home solar and battery-stored energy also will help reduce electric load on heavily used areas on O&R’s distribution system. The project will be funded under the company’s previously authorized demonstration project budget.
- Geothermal Neighborhood Demonstration project: This project will consist of the deployment of ground source heat pump (GSHP) infrastructure to test whether utility ownership of heat pump technologies can provide savings to customers as well as provide benefits to the distribution system. The project is intended to explore various means of customer outreach, utility investment, rate design, and recovery models, with a specific focus on low to moderate income customers. This project is also funded through the previously authorized demonstration project funding.
- Customer Engagement program: This initiative will help O&R encourage customers to adopt emerging clean energy technologies by enrolling them in a variety of incentivized programs (both new and existing); the Customer Engagement program design is flexible, allowing O&R to establish an environment where customers have choice, control, and convenience in their decision-making process.
- Electric Vehicle (EV) Managed Charging program: O&R is proposing an EV Managed Charging program that will incentivize EV owners to charge at off-peak hours. This will minimize grid impacts of this new source of electric load and help reduce costs for all customers.
Proposed Electric Delivery Rates
To fund these proposed electric delivery initiatives, O&R seeks an increase in revenues for electric delivery of $24.5 million, an increase of 3.3%.
Under the proposed rates in a one-year agreement, the bill for a typical residential electric customer using a monthly average of 600 kWh would increase an average of approximately $6.09 per month from $123.16 to $129.25.
If the proposed rates resulted from a three-year agreement, the levelized revenue requirement would be $22.1 million, an increase of 2.9 %. The bill for a typical residential electric customer using a monthly average of 600 kWh would increase an average of approximately $5.51 per month from $123.16 to $128.67.
Natural Gas System
As O&R customers transition towards alternatives to natural gas, they, the public and our regulators expect the company to maintain a gas system that is safe, affordable, and reliable which, by necessity, requires current investment.
The proposed investment in this rate review is consistent with, and supportive of, both climate policy goals, as well as the regulatory requirements, O&R’s obligation to provide service to customers, and the operational excellence that is expected of O&R during this transition period.
Furthermore, the company remains committed to both demand reduction and supply side efficiency initiatives that advance state clean energy policy goals.
Natural Gas System Improvements
O&R continues to make significant progress in replacing leak-prone main and related infrastructure in its natural gas distribution system, reducing emissions in support of New York’s CLCPA goals.
In addition, upgrades to existing facilities will contribute to reliability of service and support O&R’s obligation to serve.
Here are some of the projects that make up the $207 million of proposed natural gas investment over the next three years:
Pipe Replacement – Over 70% of the company’s proposed capital investment in this natural gas rate case is for replacement of leak prone facilities (retiring bare steel and obsolete plastic pipe.) The company is committed to replacing 22 miles of leak prone pipe each year and 66 miles in total from 2022-2024.
Natural Gas Detector Program --- O&R also is leveraging technology to respond to natural gas leaks by developing and installing a first-of-its-kind natural gas detector. O&R is installing these devices in business districts with inside natural gas meters, to alert O&R when there is a leak. Think of it as a fire alarm central monitoring system – the business owner and O&R’s Gas Emergency Response Center are alerted to any leaks by the device. O&R immediately dispatches company personnel. O&R has requested funding to expand the pilot into a full-scale program by installing a total of 1,400 units over three years beginning in 2022.
Monroe/Kiryas Joel Reinforcement − O&R’s current natural gas infrastructure, including the Monroe Regulator Station and the Monroe and Kiryas Joel natural gas distribution systems, needs upgrades to continue to provide reliable service, while meeting the expected future load growth in the area.
Additionally, investments in various technologies included in this natural gas rate review will allow O&R to ensure the safety of the natural gas system while providing more responsive and reliable service. For example, the proposed Gas Outage Management System will provide an electronic/mobile solution to manage customer outage information in the event of a large-scale outage. That technology would permit O&R to better manage resources, decrease restoration time, and communicate timely information to customers and other stakeholders.
Proposed Natural Gas Delivery Rates
To fund these natural gas delivery system initiatives, O&R seeks an increase in revenues for gas delivery of $9.8 million, an increase of 4.0%.
Under the proposed rates, the bill for a typical residential natural gas customer using 100 Ccf per month would increase about $7.97 per month from $137.69 to $145.66.
If the proposed new rates result in a three-year agreement, the levelized revenue requirement would be $8.9 million, an increase of 3.7%. The bill for a typical residential natural gas customer using a monthly average of 100 Ccf would increase an average of $7.45 per month from $137.69 to $145.14.
These rate plans only cover the cost of delivering electricity and natural gas to O&R’s customers. The other components that affect the monthly electric and natural gas bills are the costs of the electricity and natural gas commodities themselves which are set by largely unregulated market activity, taxes and fees.
O&R continues its commitments to investing in technologies, communications, and innovations for our customers that align to their expectations of choice, control and convenience.
O&R is making investments in our people and technology to be able to provide easy to use services for customers managing their accounts and proactive communication through various channels including web, mobile apps, text and our call center.
These investments include:
- A new billing and customer service system that will provide an updated platform for O&R to provide customers more rate options that support clean energy goals and more visibility into all customer inquiries to enhance the customer experience.
- More choice and convenience around billing and payment, including redesigning the bill to be more user friendly and highlighting the most relevant information, delivering bills electronically to over 60% of our customers, and offering more payment options through third-party partnerships with banks, apple pay, and Venmo.
- Investments in data analytics to learn more about our customers and better identify root cause of pain points and predict customer behavior (examples: frequent caller analysis, web success metrics, and personalized web content)
- Expansion of proactive alerts and messaging delivered in customers’ channel of choice (examples include text notifications at multiple touchpoints when a customer experiences a power outage, high bill alerts using smart meter data, and various notifications around billing being ready, overdue etc.)
The complete rate review request is available on O&R’s website at: https://www.oru.com/en/ny-rates-tariffs
About Orange & Rockland
Orange and Rockland Utilities, Inc. (O&R), a wholly owned subsidiary of Consolidated Edison, Inc., one of the nation’s largest investor-owned energy companies, is a regulated utility. O&R provides electric service to approximately 300,000 customers in southeastern New York State (where its franchise name is Orange & Rockland) and northern New Jersey (where it’s Rockland Electric Company) and natural gas service to approximately 130,000 customers in New York.